VW chief replaced by boss of Audi

12:01AM GMT 08 Nov 2006

Bernd Pischetsrieder has been unexpectedly replaced as chief executive of German car maker Volkswagen in a day of major changes at the top of two leading European motor groups.

News that Mr Pischetsrieder, 58, is to be replaced at the end of next month by Audi chief Martin Winterkorn, 59, came only hours after French rival PSA Peugeot Citroen named Christian Streiff as its new chief executive. Mr Streiff, 51, quit as Airbus chief executive after just 100 days in the job.

Mr Pischetsrieder's departure comes as a big surprise following VW's decision in May to extend his contract by five years to 2012. He has been pushing through a programme to cut costs and jobs, including 20,000 in Germany, at the group which also owns Audi and Skoda.

Before the contract extension was signed there had been speculation that he would be pushed out after opposition from the 10 labour representatives on VW's 20-strong supervisory board, who were angry over his relentless cost-cutting. Mr Pischetsrieder had also clashed with Ferdinand Piech, his predecessor, who is now chief of the supervisory board.

VW would not comment on the departure except to say both sides had "agreed upon his resignation effective from December 31".

At Peugeot, Mr Streiff will replace chief executive Jean-Martin Folz, who decided in April to close the Ryton plant in Coventry with the loss of 2,300 jobs. Peugeot-Citroen announced in September that Mr Folz would retire when he turns 60 in January after a decade running the car giant. Mr Streiff will jump into the driving seat just as Peugeot-Citroen is grappling with falling sales in its main western European markets.

Mr Streiff walked out of Airbus complaining that his restructuring plan had been stymied by politicians and vested interests. "I progressively came to the conviction that the governance structure of Airbus did not allow my plan to succeed," he said when he resigned.